Jason Miller, executive editor, Federal News Radio

This story was updated Dec. 4, 2013, at 11 a.m., to add new information.

The General Services Administration wants to refine its approach to the strategic
sourcing of office supplies. GSA issued a draft solicitation for the Office
Supplies 3 indefinite delivery, indefinite quantity contract Nov. 25 that puts
more emphasis on small
businesses, including consortiums, and would not be based on Schedule special item
numbers.

The draft request for proposal comes more than three
years after GSA awarded 15 companies a spot on OS2. The second generation BPA has
been moderately successful. GSA reports on StrategicSourcing.gov
that in fiscal 2013 agencies saved $48.6 million on office supplies, and spent
more than $246 million through the BPA.

GSA stated in June 2010 that agencies
could save $52 million through the contract.

GSA expects to make more than 20 awards under the potential five-year contract
that could be worth $1.25 billion over its life. GSA is in the process of
developing a list of agencies that will
commit to using the OS3 BPA. GSA estimated agencies spend more than $1.4 billion
on office supplies each year.

"Additionally, in recognition of the fact that the vast majority of agencies are
unable to commit obligated funding to this agreement due to the decentralized
funding sources and the prevalence of purchase card transactions, numerous
agencies have decided to express their commitment to utilize the resultant OS3
contracts through a formal memorandum from senior management," the draft RFP
stated.

Instead of pools of contractors under OS2, GSA decided to build the contract
around the contract line item numbers (CLINs).

CLIN 1 is exclusively for small businesses to provide a full catalog of
office supplies. GSA said it plans to award 14 contracts, including at least two
to small disadvantaged veteran-owned small businesses.

CLIN 2 is for paper and will be set-aside for small disadvantaged veteran
owned small businesses. GSA expects to make
three awards.

CCLIN 3 is for toner/ink cartidges and also will be set-aside for small
disadvantaged veteran owned small businesses. GSA expects to make three awards
under this category as well.

CLIN 4 is open to both large and small businesses, including consortiums, to
offer their full catalog of office supplies with a focus on same-day and expedited
deliveries. GSA said it expects vendors with existing brick-and-mortar operations
that serve metro areas to bid on this category. GSA didn't say how many awards it
planned to make under this category.

In addition to these four CLINs, GSA will issue a separate RFP for its Supply
Transformation Program to acquire a catalog of commercially available office
supplies that comply with the Trade Agreements Act and the AbilityOne program.

This is a significant change from OS2 when vendors had to comply with both TAA,
which requires agencies to buy only from those countries that meet certain
conditions, and AbilityOne, which hires people with physical or mental
disabilities to manufacture products and provide services. Under OS3, vendors
still must comply with AbilityOne and TAA.

GSA said it estimated the supply transformation program would have an annual value
of $250 million, or the same $1.25 billion over five years.

The agency said it expects OS3 to save the government $65 million annually on
administrative costs and an additional $90 million in annual savings captured
through lower prices.

Comments on the draft RFP are due by Dec. 6, and the agency will host an industry
day Dec. 10.

GSA said it expects to issue the final RFP in the first quarter of 2014.

There's growing concern over the use of strategic sourcing and its impact on small business.

The House Small Business Committee has held several hearings over the last few
years on strategic sourcing, including one in June where
lawmakers pressed GSA and Office of Federal Procurement Policy officials about
whether they would make the strategic sourcing contracts mandatory.

"I'm not convinced that the draft Office Supply 3 (OS3) Request for Proposals
issued for the purchasing channel will deliver significant or sustainable
savings," said Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee,
in an emailed statement. "This contract could be detrimental for the GSA Office
Supply Schedule Contract (Schedule 75), which has been beneficial for small
businesses and taxpayers. While a few small businesses will do very well under
OS3, hundreds of small businesses will lose the opportunity to compete for federal
contracts, and the government won't achieve significant additional savings. If
this is the vision of strategic sourcing that the administration is embracing,
taxpayers and small businesses should be greatly concerned."